THE EXIT FEE.
Extreme Brexiteers may rail against the figures, but the fact is we are going to pay a heavy price if we exit the European Union. That is the most important message from the Autumn Statement Some of us hope public opinion will change and we can yet halt this madness. But as it stands we are heading out and the Chancellor has spelt out the consequences of Brexit.
£59bn of the staggering £122bn of extra borrowing is directly attributable to Brexit according to the Office of Budget Responsibility (OBR). Because of that borrowing our debt to gross domestic product is set to peek at 90% in 2017-18. The weaker pound caused by the Brexit shock is forecast to lead to a 5% increase in food prices next year. A real problem for the Just About Managing.
AT LAST A MOVE AGAINST PENSIONERS ?
Perhaps it has been lost a little amidst the analysis of the immediate impact of the Autumn Statement but Philip Hammond this week flagged up a major area of controversy for the next parliament. The triple lock on pensions is to come under review. Rightly so, whilst some pensioners still struggle, most have never had it so good, to coin a phrase. In any case it is the young burdened by tuition fees, job uncertainty and the inability to buy a home that must be top priority for government in the third decade of this century, if not before. The problem is that up to now the elderly vote in larger numbers than the young. In the next parliament ministers will have to be courageous. I think pensioners will get the point but well done Mr Hammond for preparing the way for a change of policy.
At one point it looked as if George Osborne’s pet project was going to be quietly forgotten by his successor. However there was enough support for devolution to force the Chancellor to input significant funds into the Northern economy. £3bn for northern local enterprise partnerships in growth deals, a £400m investment fund to support smaller businesses and £60m in development funding for Northern Powerhouse Rail.
Areas about to elect city region mayors like Liverpool City Region and Greater manche4ster will get new borrowing powers. There is talk of a municipal bond to aid infrastructure investment. The continuing failure of Leeds to resolve the elected mayor issue and avail itself of these incentives is notable.
Specific road improvements include the highly congested part of the M60 near Worsley, the Waterfront Link in Warrington and dualling the A66 in the North Pennines.
MIXED PICTURE FOR BUSINESS.
The big challenge for business in the North is productivity. Nationally we are 30% less productive than the Germans and the North lags well behind London. A Productivity Investment Fund will help. There was relief that the increase in the Living Wage was modest and a welcome for the further cut in corporation tax. Some wanted a VAT cut to mitigate rising inflation but that wasn’t going to happen, nor apparently reform of business rates.
There is widespread dismay that the Chancellor did not address the growing adult social care crisis but overall Philip Hammond showed himself to be a safe pair of hands on his début. He is not as close to the Prime Minister as George Osborne was to David Cameron but nor is there the ruinous rivalry of the Blair/Brown years.
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